Mutual fund (or memorandum quotation)

Mutual fund (or memorandum quotation) – A professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities). A mutual fund is usually an open-ended fund and has a fund manager that trades (buys and sells) the fund’s investments in accordance with the fund’s investment objective. A fund’s investment objectives (and or its names) define the type of investments in which the fund invests. In return for one’s investment, shareholders receive an equity position in the fund, and in effect, in each of the fund’s underlying securities. A fund’s asset-value-nav/" data-gt-translate-attributes='[{"attribute":"data-cmtooltip", "format":"html"}]' tabindex='0' role='link'>net asset value (NAV) is calculated every day. While funds offer a choice of liquidity and convenience, they charge fees and often require a minimum investment. A contractual investment advisory fee is charged for the management of the fund’s investments, along with other fees. Some of the more significant (in terms of amount) are a transfer agent expense, custodian expense, legal/audit expense, fund accounting expense, registration expense, board of directors/trustees expense, etc. Shareholders are free to sell their shares at any time, although the price of a share of the fund will fluctuate daily, depending upon the performance of the securities held.